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Talk:Small business success Wiki
I suppose most people can tell you just where it is they may want to go and perhaps why--and I would imagine most can describe where they are relative to that objective--the key of course is getting from point A to B. This is where we seperate the men from the boys or those who would be successful in obtaining their goals and those that fail. It takes persistence, determination and will--it takes incentivization. In other words you must want it and feel it worth all the effort to get there-someone once said it isn't any big deal to walk across a plank to get to the other end if the plank is laying on the ground and there's no risk or perhaps a reward to get there. But, it takes a little more (something) to walk to the other end if the plank is several stories in the air bridging a great fall-say connecting two buildings. If you fall off the plank laying on the ground-hey no big deal however if you fall off the one stretched between the two buildings you might in fact loose your life. In this latter case I don't know about you but it would take at least a few bucks or maybe even a new car at the other end to entice me to take the risk. What is it they say no pain no gain or the reward needs to warrant the risk--some people of course have different needs. A person with a great deal of money might not be incentivized by money at all-say the person was sick, very sick and the possibility of health at the other end is great enough to, in his or her eye, warrant the risk--worth taking the chance. Management really is simply incentivizing those who may work for you to accomplish or help you accomplish just what it is your trying to do--now lets start bringing the five number back into the picture-say your the President and CEO of your own company--and there are the five numbers we talked of before--gross revenues, costs, gross margin, total operating expenses and then pretax profits--your company is running at break even--hypothetically lets say for every dollar of sales costs are 50% or 50 cents--which means your gross margin is 50 cents or 50 %-total expenses are also 50 cents on the dollar or 50%--bottom line you are at breakeven! Right? Of course. Now then to say go from break even to say 10% pretax profit (a big difference wouldn't you say-in fact the difference between making money and not making money)--Ok, to do this something has to change--theoretically say for example costs have to go from 50 cents on the dollar to 40 cents on the dollar all else staying equal-or say costs stay the same, then total expense need to come down to 40 cents or of course some combination of either costs and expenses going down and/or perhaps revenues go up 10%--either way you achieve your objective. Let's take a little side trip here, say change the subject slightly--depending on your background people tend to be either offensive players or defensive players--or so it seems in my experience. They either go crazy cutting cost and expenses if they're a defensive type or they go nuts trying to generate more business to satisfactorily cover their costs--either way and I'm not going to spend much time on this here anyway-to be successful you have to be efficient or effective doing both--of course this doesn't usually happen given the tendency to be either more effective one way or the other. Now then let's get back to you're being the CEO--a smart CEO who understands incentivization and all this fundamental arithmatic--one thing else you realize you're not the best technitian--that means your not the best violin player in the orchestra but on the other hand your a great orchestra leader as a good CEO needs to be--that's his or her area of expertise--that's what they like doing best and what they are best at. Now if your really as smart as you think you are you may understand your a great business leader but a poor Marketing and Sales guy--your forte is not generating revenue--so what you need do is find the Marketing and Sales "technitian" that is-this of course takes some effort but you find someone who has a history/track record of Marketing and Selling product similier to yours (where might to the easiest quickest place to find this guy-look to your competition) okay so you find this guy--then the trick is you don't tell him what he's going to do (incidentally this is before you hire him or her) you ask the person what they feel they are capable of (maybe discount it or handicap it a bit) of achieving given the tools given to accomplish the job (any fool can increase sale by either giving away the product or increasing costs and expenses to get it done i.e. what's the sense in increasing sales 10% by increasing sales expense 10% or even some greater amount--makes no sense you have to do something better more efficiently but of course that's why you hire the expert, specialist, guru or great technitian! Next thing once you've asked what your great sales guru feels they are capable of achieving you ask them what it would/will take to properly or effectively incentivize that person to get it done--what are they or you willing to risk, given the height of the bar (or plank)--just for an example and being to some degree facitious you offer to double the persons income if they achieve what they think they're capable of doing or you get yourself a new expert if he doesn't--you know what I'm saying I'm sure. Ok now let's say you've got a pretty good bet going re next periods or year's revenue--same goes then for the next number--costs! You find yourself the best possible cost concious operations manager you can find-a proven commodity, someone with the track record, obvious ability in you area you can find--then you look for that person to manage expenses and your on your way to developing a pretty good team--a team with a high probability of success that have agreed to work (happily and exitedly) given the incentives you've mutually agreed on and both feel fair and important enough to keep you in the game (both feet, head, heart and wallet)! In my view this is what effective managment is all about--it isn't easy and in fact in my serious opinion you need to be born to it--or so determined to be successful your willing to pay the price to get there-most aren't--they think they are but they're not-I'm not saying they don't try but most just don't understand the deal. When you get right down to it, it's simple--some are just better at it than others. Luck might play a part in it but I prefer to say its the talent--after all they don't pay managers big bucks to just ride the market. I'd like a nickel for everytime I've heard someone thought to be a heavy weight say well the market has just been down--that's what you're paid the big bucks for, to make a difference--with respect to the market I remember my very successful grandfather saying once--remember son, when its raining out someone is selling umbrelllas and making a killing! 23:44, February 13, 2012 (UTC)R Hopkins LLC